Monday, December 5, 2016

Not global trade but increased efficiency.

Three factors have contributed to changes in manufacturing employment in recent years: Productivity, trade, and domestic demand. Overwhelmingly, the largest impact is productivity. Almost 88 percent of job losses in manufacturing in recent years can be attributable to productivity growth, and the long-term changes to manufacturing employment are mostly linked to the productivity of American factories.

We shouldn't try and stop productivity improvement. That is the path to immiseration and poverty. The focus should be on 1) Continuing to improve productivity and then 2) Improving the support mechanisms related to skill building and job transition.